¹ Cain, Louis P. and Paterson, Donald G., “Factor Biases and Technical Change in Manufacturing: The American System, 1850–1919,” this Journal, 41 (06 1981), pp. 341–60.Google Scholar

² Habakkuk, H. J., American and British Technology in the Nineteenth Century (Cambridge, 1962);Google Scholar and Rothbarth, Erwin, “Causes of the Superior Efficiency of the U.S.A. Industry as Compared With British Industry,” Economic Journal, 56 (09. 1946), pp. 383–90. Habakkuk concentrated his attention on the first half of the nineteenth century but argued the history was relevant to the latter half as well, pp. 197, 215.CrossRefGoogle Scholar

³ Chandler, Alfred D., The Visible Hand (Cambridge, Mass., 1977), pp. 241–, 224–.Google Scholar

⁴ Atack, Jeremy, “Returns to Scale in Antebellum United States Manufacturing,” Explorations in Economic History, 14 (09 1977), pp. 337–59;CrossRefGoogle ScholarJames, John A., “Structural Change in American Manufacturing, 1850–1890,” this Journal, 43 (06 1983), pp. 433–59;Google Scholar and Schmitz, Mark, “The Elasticity of Substitution in 19th-Century Manufacturing,” Explorations in Economic History, 18 (09 1981), pp.290–303.CrossRefGoogle Scholar

⁵ To use the terminology in David, Paul, Technical Choice, Innovation, and Economic Growth (New York, 1975), p. 65.Google Scholar

⁶ Schmitz, “Elasticity of Substitution,” pp. 296–301.Google Scholar See also the earlier paper by Uselding, Paul, “Factor Substitution and Labor Productivity Growth in American Manufacturing, 1839–1899,” this Journal, 32 (09 1972), pp.670–81.Google Scholar

⁷ David, Technical Choice, p. 87.Google Scholar

⁸ Use of this cost function is relatively less expensive in its data requirements than the translog functional form we used in our earlier study which is attributable to the absence of cross equation constraints.Google Scholar

⁹ Other recent work by economic historians employing the translog cost function includes: Phillips, William H., “Induced Innovation and Economic Performance in Late Victorian British Industry,” this Journal, 42 (03 1982), pp. 97–104Google Scholar and “Testing for Induced Innovation in a Declining Economy: British Coal, Iron, Textiles in the Late Victorian Era” (working paper, University of South Carolina, (June 1982);Google ScholarWoolf, Arthur G., “Energy and Technology in American Manufacturing, 1900–1929,” this Journal, 42 (03 1982), pp. 230–32 and “Electricity, Productivity, and Labor Saving: American Manufacturing, 1900–1929,”Google ScholarExplorations in Economic History, 21 (June 1984), pp. 176–91.Google Scholar

¹⁰ Keehn, Richard H. and Smiley, Gene, “Short-term Interest Rates in New York and San Francisco, 1872–1898,” Business and Economic History, 9 (1980), pp. 181–91.Google Scholar

¹¹ This mode of research is common in contemporary work on technical change. For example, empirical work at the two-digit SIC level is found in Griliches, Zvi, ed., R and D. Patents, and Productivity (Chicago, 1984).CrossRefGoogle Scholar

¹² Parks, Richard W., “Price Responsiveness of Factor Utilization in Swedish Manufacturing, 1870–1950,” Review of Economics and Statistics, 53 (06 1971), pp. 129–39;CrossRefGoogle Scholar and Woodland, Alan D., “Substitution of Structures, Equipment and Labor in Canadian Production,” International Economic Review, 16 (Feb. 1975), pp. 171–87.CrossRefGoogle Scholar

¹³ The error term is assumed to be multivariate normally distributed with a non-singular covariance matrix.Google Scholar

¹⁴ Berndt, Ernst, “Reconciling Alternative Estimates of the Elasticity of Substitution.” Review of Economics and Statistics, 8 (03 1976), pp. 59–68.CrossRefGoogle Scholar

¹⁵ Schmitz, “Elasticity of Substitution,” pp. 296–301. See also Uselding, “Factor Substitution and Labor Productivity,” pp. 670–81.Google Scholar

¹⁶ Mann, H. Michael, “Seller Concentration, Barriers to Entry and Rates of Return in Thirty Industries, 1905–1960,” Review of Economics and Statistics, 48 (08 1966), pp. 296–307.CrossRefGoogle Scholar

¹⁷ The following notes the SIC groups and the range of the average L/Y: SIC 22–23, .61 to .70; SIC 24–25, .96 to.99; SIC 28–30, .22 to .31; and SIC 34–39, .42 to .49.Google Scholar

¹⁸ These five are the labor coefficient for transportation equipment (SIC 37) and miscellaneous goods (SIC 39), the capital coefficient for textiles (SIC 22) and petroleum (SIC 29), and the materials coefficient for stone, clay, and glass products (SIC 32).Google Scholar

¹⁹ James, “Structural Change,” pp. 433–59.Google Scholar

²⁰ James, John A. and Skinner, Jonathan S., “The Resolution of the Labor-Scarcity Paradox,” this Journal, 45 (09 1985), pp. 513–40.Google Scholar

²¹ We estimate that the Allen-elasticities of substitution record 9 cases of capital-material complementarity, 6 cases of capital-labor substitution, and 4 cases in which the results are insignificantly different from zero.Google Scholar

²² Burns, Malcolm R., “Economies of Scale in Tobacco Manufacture, 1897–1910,” this Journal, 43 (06 1983), pp.461–73;Google Scholar and Chandler, The Visible Hand and as cited by Burns.Google Scholar

²³ Asher, Ephraim, “Industrial Efficiency and Biased Technical Change in American Manufacturing: The Case of Textiles in the 19th Century,” this Journal, 32 (06 1972), pp. 431–42.Google Scholar

²⁴ Because substitution favored unskilled labor and capital over skilled labor, it is interesting to speculate whether or not this bias bore more heavily on particular skilled workers, such as tailors.Google Scholar

²⁵ Lamoreaux, Naomi, The Great Merger Movement in American Business, 1895–1904 (New York, 1985), p. 41.CrossRefGoogle Scholar

²⁶ In only one sector, paper and its products, is the null hypothesis of no biased technical change accepted at the .95 level of confidence. Even at the .99 level, the null hypothesis would gain acceptance in only three cases.Google Scholar

²⁷ Uselding, “Factor Substitution,” pp. 670–81.Google Scholar

²⁸ Parks, “Price Responsiveness,” pp. 129–39; and Woodland, “Substitution,” pp. 171–87.Google Scholar